Sheridan Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2022. Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $23,600, direct labor $14,160, and manufacturing overhead $18,880. As of January 1, Job 49 had been completed at a cost of $106,200 and was part of finished goods inventory. There was a $17,700 balance in the Raw Materials Inventory account. During the month of January, Sheridan Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold during the month. The following additional events occurred during the month. 1. Purchased additional raw materials of $106,200 on account. 2 Incurred factory labor costs of $82,600. Incurred manufacturing overhead costs as follows: indirect materials $20,060; indirect labor $23,600; depreciation expense on equipment $14,160; and various other manufacturing overhead costs on account $18.880. Assigned direct materials and direct labor to jobs as follows. 3. 4. Job No. Direct Materials 50 51 $11,800 46,020 Direct Labor $5.900 29,500
Sheridan Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2022. Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $23,600, direct labor $14,160, and manufacturing overhead $18,880. As of January 1, Job 49 had been completed at a cost of $106,200 and was part of finished goods inventory. There was a $17,700 balance in the Raw Materials Inventory account. During the month of January, Sheridan Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold during the month. The following additional events occurred during the month. 1. Purchased additional raw materials of $106,200 on account. 2 Incurred factory labor costs of $82,600. Incurred manufacturing overhead costs as follows: indirect materials $20,060; indirect labor $23,600; depreciation expense on equipment $14,160; and various other manufacturing overhead costs on account $18.880. Assigned direct materials and direct labor to jobs as follows. 3. 4. Job No. Direct Materials 50 51 $11,800 46,020 Direct Labor $5.900 29,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Sheridan Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1,
2022. Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $23,600,
direct labor $14,160, and manufacturing overhead $18,880. As of January 1, Job 49 had been completed at a cost of $106,200 and
was part of finished goods inventory. There was a $17,700 balance in the Raw Materials Inventory account.
During the month of January, Sheridan Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50
were sold during the month. The following additional events occurred during the month.
1.
2
3.
4,
Purchased additional raw materials of $106,200 on account.
Incurred factory labor costs of $82,600.
Incurred manufacturing overhead costs as follows: indirect materials $20,060; indirect labor $23,600; depreciation expense
on equipment $14,160; and various other manufacturing overhead costs on account $18,880.
Assigned direct materials and direct labor to jobs as follows.
Job No.
50
51
52
Direct Materials
$11,800
46,020
35.400
Direct Labor.
$5,900
29,500
23.600
Transcribed Image Text:Job No.
50
51
52
(a)
Direct Materials
$11,800
46,020
35,400
Direct Labor
Predetermined overhead rate
$5,900
29,500
23,600
Calculate the predetermined overhead rate for 2022, assuming Sheridan Company estimates total manufacturing overhead costs
of $991,200, direct labor costs of $826,000, and direct labor hours of 23,600 for the year. (Round answer to the nearest whole
percent, e.g. 25%)
%
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